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Research Sees Sharp Fall in IM Property Investment Q2



August 13 , 2016

Increasing concerns over the underlying economic, political and financial environment are hurting Asia Pacific property investment volumes, Real Estate market research firm Real Capital Analytics (RCA) said. The latest research report by the research firm said that income-producing investments fell 48% year on year in the second quarter this year in the Asia Pacific region. Development sites, however, saw a burst of activity and were up 47% during the same time period.

RCA research found, during the first half in the year, activity in Asia Pacific’s three largest markets of Australia, China and Japan totaled USD11.1billion, a sharp fall of 61% year on year. Only smaller markets registered increases in USD terms.

Transaction volumes fell across all income-producing property sectors in the region, with retail hit the hardest as volume declining by 67% year on year in the second quarter. Industrial dropped 54% and apartment 49% year-on-year during Q2. Development site activity, however, has remained solid and sales grew 47% year on year in the second quarter.


However so, RCA research also found despite the overall reduction in transaction volumes in the Asia Pacific region, cross-border activity continued to grow and accounted for almost 33% of total volume in the second quarter, the highest since the last peak at the second quarter of 2008. 

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Risk aversion, however, is strengthening due to heightened external market volatilities, according to RCA. This aversion is particularly strong for investors that are targeting core and core-plus assets with secured long-term income, the research firm said.


RCA said there is limited pressure on real estate owners to divest as long as the cost of borrowing remains low and occupier markets stable, and "current pricing remains aggressive and at historic highs".


“As a result buyers struggle to find suitably priced assets that fit their investment strategy. The stand-off is inhibiting investments and slowing market activity.” Petra Blazkova, director of RCA Asia Pacific.

- APMR News

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